Q & A with Bill Gatti of TREK on new projects and affordable housing

TREK Development Group has recently been selected by the city to redevelop some of Pittsburgh’s most prominent real estate, including the Garden Theater block on the North Side and Mellon’s Orchard South in East Liberty.

The Downtown Pittsburgh-based real estate development firm specializes in projects that are driven by neighborhood stakeholders through collaboration. TREK projects include affordable and market-rate residential and commercial properties, parks, and community centers focused on building sustainable communities.

Bill Gatti is the founder, president and CEO of TREK and is directly involved in all aspects of the firm’s work in Pittsburgh. Here’s what he had to say about current projects and how developers can work with policy-makers and communities to address affordable housing in our region.

Tell us about some of the projects you are working on right now.

The Garden Theater Block: We have been working to redevelop the Garden Theater Block since January 2014. This important block cannot be redeveloped in its current form under the current zoning classification. The height limitation is significantly lower than the 120-year-old structures that are currently on the site. We remain committed to finding a solution, working diligently with the URA and neighborhood, particularly the Allegheny Central City Association, to find a path forward. I am confident we will find a way forward on a portion of the block within the next 30 days.

A beer can that was uncovered while rehabbing the old Duquesne Brewery.

Brew House Lofts: The adaptive reuse has been a very interesting ride. The Brew House association and their artists had been living in this abandoned and dilapidated structure for 25 years. After an eight-year conversation with their leadership, we entered into a partnership in which we converted the old brewery into 76 loft apartments (a number of which are set aside at affordable rates for artists) and related public and private studio spaces and an art gallery. It is more than a $20 million investment.

Mellon’s Orchard South: We are very excited to be taking on this important site in the heart of East Liberty in 2017. [TREK was awarded exclusive rights in May of this year through a competitive request-for-proposals process to purchase and develop the city-owned parking lots at North Euclid and Station Streets, next to the new location of Schoolhouse Electric & Supply Co.]. We have begun a very interesting dialogue with the city, URA and the neighborhood about design and affordability that we are confident will bear fruit. And speaking of bearing fruit, there will definitely still be a place for the farmers’ market.

View of the passageway through the Eighth and Penn development to Katz Plaza in Downtown.

Eighth and Penn: We are planning a 140-unit residential building that is different than what Pittsburgh has seen downtown so far. We are combining two turn-of-the-century structures with a modern (but respectful) addition. We held the Pittsburgh Cultural Trust’s Nine Guiding Principles in mind, particularly: the importance of lateral connections and embracing the participation of an artist at the conceptual phase.

There will be a lateral connection through our development that will allow permeability and promote pedestrian cross-traffic mid-block. What we are trying to do is add value to our own building by adding value to properties around it. This will inform design and development on the rest of block. Eighth Street will be activated like it has not been in a long time.

As a developer of affordable housing, why is it so important for our city?

Affordable housing has always been important to Pittsburgh. Since 1991 Trek has been developing affordable and mixed-income housing. There are never enough well-designed, properly located, professionally managed affordable living options.

The topic is getting more attention now because (for the first time in my career) we are experiencing Pittsburgh’s version of a dynamic shift in the market rate environment. The contrast is startling. Many people are worried (rightfully so) that this will have a negative impact on our more vulnerable citizens.

It is very exciting to see our city re-populating and neighborhoods getting rebuilt. We need to find a way to maintain the positive momentum but keep the whole market in mind.

How can private developers build projects with affordable components while ensuring they meet their bottom line?

We have used tax credits (affordable housing and historic), as well as a whole array of financing types, to keep our cost of debt low enough to ensure affordability. Funding sources such as these are very scarce. It is technical and complicated—so many traditional market rate developers find it difficult to change their mindset [so they can utilize these sources] but it is possible.

What local policy changes could positively impact your ability to build affordable units?

The Mayor and Councilman Lavelle’s Affordable Housing Task Force came forth with some well-thought-out recommendations. The most important one for us is the funding of the affordable housing trust fund for gap financing. Continued infrastructure investment from the city is also vital. These are not just real estate deals; we are working to rebuild our city.

With limited funds available for affordable housing, how does your company ensure you can incorporate good design into your projects while still meeting the bottom line financially?

Good design is not more expensive. It takes more focus, creativity and vision but not necessarily more money. The key is making sure you have the right design and construction team in place and that goals and values are aligned. Not only on the site in question but aligned with the broader neighborhood. There is tremendous value created when we all work together.

About The Author

Maya Henry is a writer, blogger and planner who has worked for the City of Pittsburgh, at the nonprofit Lawrenceville Corporation marketing and supporting small businesses in Lawrenceville, and at AIA Pittsburgh. Maya received an M.A. in Historic Preservation Planning from Cornell University in 2008.